Please Don't Squeeze the Sharman

Share

Please Don't Squeeze the Sharman

SYDNEY – The makers of Kazaa, the peer-to-peer file sharing software, challenged the validity of a court order used by the Australian recording industry to raid its offices last week.

The company, Sharman Networks, threw down the legal challenge Tuesday in Australia's Federal Court in Sydney. Sharman was raided by Music Industry Piracy Investigations, a private investigations unit established by the Australian Recording Industry Association to crack down on copyright infringement, including illegal Internet file sharing.

MIPI successfully applied to the federal court for a number of private search warrants, known as Anton Piller orders, which were executed at 12 locations, including Sharman's offices in Sydney. The order allowed MIPI to seize data and documents from all 12 sites, including the private residence of Sharman chief executive Nikki Hemming. The raids are a prelude to a copyright infringement suit, which will argue that Sharman has the ability to block the transfer of copyrighted works through its software but refuses to do so. Sharman vehemently denies the claim.

On Tuesday, Sharman launched a legal counter-attack, accusing MIPI of not disclosing all "material facts" to the court when it applied for the order. If that charge is proven, the order could be rendered invalid. The company claims MIPI did not tell the court there had been similar proceedings against Sharman in other countries, which it claims is an omission serious enough in nature to have the order struck down.

"The music industry had already been unsuccessful in comparable proceedings in the Netherlands and U.S. concerning allegations of copyright infringement against other providers of P2P technology," a statement issued by Sharman read, adding that the company had "already cooperated fully in current U.S. proceedings by producing documents and giving statements, and that the documentation now sought by Australian recording industry companies need not be applied for or produced a second time".

Sharman's U.S.-based trial counsel, David Casselman, who has flown to Sydney to assist in proceedings, believes the recording industry is targeting the company in Australia because legal attacks in other countries have failed. He further claims MIPI made misrepresentations to the court in seeking the order. "(MIPI) failed to acknowledge that the only two courts to address that issue have found that the P2P software company does not have control," he said.

"They have now determined from the outcome in the Netherlands and the very bold writing on the wall in the U.S. that things are not faring well for them in their chosen jurisdiction," Casselman said. "The law here requires essentially the same things in the U.S. when it comes to proving vicarious or indirect infringement."

MIPI general manager Michael Speck, who has spearheaded the investigation, denies Casselman's assertion that the initiative is a part of a global strategy on behalf of the recording industry.

"This is an Australian case brought by the Australian copyright owners," he said. "Six months ago we identified technical and physical changes to the infrastructure of the Kazaa operation that make it clear that they had become an Australian operation infringing copyright in Australia."

In another development, the country's largest telecommunications company and ISP, Telstra, moved to support Sharman in its application to have the order "set aside." The telco, which is 50 percent government owned and one of only a handful of Australian companies to sell digital music over the Internet, was itself raided by MIPI. Speck said while the company is not itself a legal target, it held information pertinent to the case. Despite supporting the broader action being launched by MIPI, a spokesman for the telco said the company is worried the issuance of the order will set a dangerous precedent.

"We think the Anton Piller order is a heavy handed order that is expensive to comply with, and gives the subject too few legal rights," said Telstra spokesman Andrew Maiden. "We think that there are alternative legal instruments that could have the same effect without the drawbacks.

"It's a sledgehammer for a walnut. This is a federal court decision ... that will be relied on as a precedent."

The decision by Telstra to rush to the aid of Sharman has surprised MIPI. "I'm surprised a company with a legitimate music business and not a party to the actual proceedings would want to get involved with the pirates," he said.

Properties raided by MIPI included companies and universities in three states, among them Telstra, Monash University, Akamai Technologies and Brilliant Digital Entertainment.